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European markets lost on average over 1% yesterday as the European Central Bank (ECB) was brought before the German Constitutional Court for a hearing in relation to their bond-buying operation. The ECB supported the sovereign debt markets during the crisis in order to bring stability to the region; the court hearing will determine whether the bond-buying scheme put in place was legal or not. Today is the second day of the hearing, and traders are unwilling to buy back into the market in case the ruling goes against the ECB.
Overnight, Japanese equities finished a touch lower after the country announced that core machinery orders dropped 8.8% in April compared with March. This is the first drop in three months, which has spooked the Asian markets.
Online retailer ASOS announced a 45% rise in quarterly sales year-on-year; sales were strong in both the UK and international divisions. The share price is consequently up 3.5%.
The UK announced a slight drop in the number of people claiming unemployment benefit; this has provided a small boost to UK equities.